One reason why Harvey may not vastly harm the overall economy, according to Goldman Sachs, is that the rebuilding efforts in the future could offset slowdowns elsewhere.

“The result for builders in the short run is likely to be substantially delayed home closings and a dip in new orders in the region,” said Carl Reichardt, an analyst at BTIG.

Before Harvey, Houston Had a Glut of Rentals. Not Any More
Not even two weeks ago, Houston had one of the weakest apartment markets in the country with tens of thousands of vacant units. Now landlords say prospective renters are lining up outside their doors and some have almost no units left.

Before the storm, Atlanta-based Gables Residential, which owns about 3,500 units in the Houston area, had a couple of hundred vacant units. Gables received requests for 2,500 units from 50 different companies, including energy firms, looking for furnished apartments for local workers and insurance adjusters who may need to bring workers in. It suspended its online leasing to avoid renting out units that had already been booked online.

“It is going to fundamentally change the housing market in Texas for a while,” said Cris Sullivan, Gables’ chief operating officer.

Hurricane Harvey, which dropped record amounts of rain in parts of Houston, poses unique housing challenges because it affected a much larger swath of Houston’s population than has been impacted by previous storms. The White House said 100,000 homes in total were affected in Texas and Louisiana. In Houston, neighborhoods flooded that have never flooded before, places where many people don’t have flood insurance, which is likely to make the recovery longer.

Finding housing for victims displaced by the disaster will be a major challenge for this metro area of 6.7 million. In Houston, many of the units that were vacant before the storm were in luxury high-rise buildings, a legacy of the post-recession oil-and-gas boom when Houston’s economy seemed unstoppable. Those units were largely spared by Harvey while affordable housing units suffered more damage.

Ty Counts, a rental agent in Houston since the 1990s, said lower-income residents in the city already had challenges finding housing, given that the majority of new construction has been at the high end. Houston’s biggest block of available rental housing lies within the urban core, with just over 2,200 vacant apartments found in the downtown area, according to RealPage, a real estate software and data analytics firm based in Dallas. Monthly rent for available units in that area averages nearly $1,800, compared with just over $1,000 for the city as a whole.

“For the people who have means and money and insurance, they’re going to be fine,” Mr. Counts said. He said he worries lower income renters will “really suffer because if all the cheap apartments are gone, where are they going to go?”

Jesley Romero and her husband and two young sons are staying with family temporarily, after being rescued Friday by ladder and boat from the house they had been renting near the Addicks Reservoir in northwest Houston. She said she wants to find an apartment in the same elementary school district but knows of nothing in the family’s price range of $800 to $900 a month, particularly since so many of the properties they might have afforded also flooded.

“We’re living basically in my brother’s living room, staying on a pullout couch,” she said, fighting tears. “Only time can tell what the future holds.”

The storm appears poised to transform a rental market from one where supply exceeded demand to the other way around, both for high-end and low-end properties. Renters will likely have to compete for a dwindling number of vacant units, and in some cases pay higher rents than they would have before the disaster.

Apartment researchers said they anticipate that rents could rise by as much as 10% over the next several months. Until recently, Houston rents were essentially flat. Many landlords also have been offering tenants who move in two or even three months’ rent free. Those breaks are likely to disappear.

Money360, Ten-X launch financing partnership
Money360, an online commercial real estate lending platform, has joined forces with Ten-X to offer pre-arranged financing for select properties on the online real estate marketplace’s platform. The move is part of an effort to provide more surety of closing to sellers and prospective buyers.

“The process will provide a customer-friendly solution to buyers who need financing to close transactions,” said Steve Jacobs, general manager of Ten-X Commercial. “This partnership will enable prospective buyers to make bids and offers with greater confidence, which in turn will lead to accelerated close rates for sellers.”

Previously, buyers who purchased properties through Ten-X either paid cash or secured their own loans through typical financing channels. This partnership, however, will allow buyers to see a financing term option before they commit to buying a property. Under the agreement, Money360 will work with Ten-X to determine which commercial properties on the platform are appropriate for this type of financing, and then will pre-underwrite bridge and permanent loans for qualifying properties. The lenders’ offers will be listed on the Ten-X property detail page and after the property trades, Money360 will work with buyers to underwrite, process and close the loans to facilitate the transaction.

Trump’s End to Dreamers’ Program Will Hurt Real EstateThe Trump administration is ending the five-year-old program that protects undocumented immigrants who entered the U.S. as children from deportation and is giving Congress until March 5 to pass legislation to replace it.

Experts say the end to the program will mean a deficit in the workforce for everything from construction to technology employees.

“In a nation that is skewing older, with more and more people leaving the workforce, most nations in our position are looking for ways to attract young, motivated people who will contribute to the country and most certainly the economy,” says The Collingwood Group Managing Director Tom Booker. “Blaming children for the sins of their parents never makes sense, but in this case is counter to our needs for young, motivated workers in everything from construction to information technology.”

President Donald Trump signaled that he hopes Congress will replace the program, which was created by former President Barack Obama using executive authority, with one crafted by lawmakers. “Congress, get ready to do your job – DACA!” he tweeted Tuesday morning, ahead of the announcement.

Millennial Women Have More Debt, But Better Credit, Than Men
A survey of millennials finds a gender divide within that generation on debt and credit. Millennial women owe more money, yet their credit scores were higher than their male counterparts.

“While millennial women had higher levels of student and other types of debt, with an average of more than $68,000 compared to $53,000 for millennial men, the women were better at paying it down, suggesting that they may be more responsible borrowers,” says Situs RERC Assistant Vice President Jennifer Rasmussen.

Rasmussen, who has a Ph.D. in psychology, broke it all down on the Jim Bohannon Nationwide Radio Show.>>CLICK HERE TO LISTEN TO PART ONE AND STAY TUNED FOR PART TWO<<

Are we headed for another housing collapse?
When an average $1 million home goes on the market in Santa Clara, Calif., it can reel in 20 offers. Quickly, and without batting an eye.

“As long as high-tech companies keep bringing people here from all over the world and paying them, high prices will continue,” says Brett Burns, a broker with San Jose-based Climb Real Estate. “If Google uprooted and set up shop in Texas, maybe that would make a big splash, but I don’t see a plateau as long as demand keeps getting fed.”

Median home prices across the nation have been increasing with gusto, though perhaps not at levels as staggering as San Jose’s median price tag of $1,183,400. In July, existing-home prices jumped by 6.2 percent compared with the same period in 2016 to an average cost of $258,300, according to the National Association of Realtors. While trends diverge profoundly from place to place — for all sorts of economic, geographical and lifestyle reasons — a good many of the nation’s metropolitan locales have experienced record appreciation. Coupled with inventory that is 9 percent lower than it was in 2016 and income that has not kept up with prices, the natural post-recession question arises.

One decade after the biggest housing collapse in America’s history led to a global recession, could we be facing another crisis?

“Not happening,” says Burns, adding that the 2007 housing crash “was based on lending practices which have since been cleaned up.”

Many industry experts agree. The subprime mortgages that targeted borrowers with less-than-perfect credit and led to financial turmoil 10 years ago do not play a role in today’s real estate market.

“When you talk about a bubble, you think of people being really exhilarated and excited and prices going way up. We don’t see that now,” says Annie Cion Gruenberger, who has been a New York City broker with Warburg Reality for 28 years. “We have a very positive market, but a targeted market of smart buyers.”

So what do high price tags and low supply mean, if not economic catastrophe?”

The 2007 collapse spooked home builders so much, they didn’t want to build anything but high-end properties. That drove up house prices and made it harder for people to buy starter homes.

Meanwhile, the market was split into two halves: places such as Las Vegas, where development was overstretched and unsustainable, and which is still struggling to bounce back; and places such as Portland, Ore., and Silicon Valley, where NIMBY regulations limit how much construction can happen, meaning fewer homes available to buy. As a result, there’s a real lack of housing where the jobs are.

While cities such as Seattle, Denver, San Francisco and Austin show double-digit spikes in house prices, cities such as South Bend, Ind., Baton Rouge, La., and Atlantic City report dwindling numbers. On average, 87 percent of the 150 housing markets tracked by NAR experienced rising prices in 2016, up from an average of 75 percent in 2014.

Buyers Need $181K Salary to Afford Home San Francisco
Buyers looking to snap up a home in the San Francisco metro area will need to pull in a $181,349 annual salary, a new report from mortgage tracker HSH said this week.

On top of that, they’d then pay $4,231 a month in home-related taxes, interest and other costs like a mortgage loan’s principal.

2118 Vallejo St. in San Francisco sold for $7.95 million in 2014 and is now estimated to be worth $9.1 million.

HSH looked at how much it costs to buy a home in the nation’s 50 largest metropolitan areas and looked at mortgage data for S.F. metro region, which includes San Francisco, Alameda, Contra Costa, Marin and San Mateo counties.

It found that the amount needed to buy a home locally shoots up even further if a buyer decides to put less money down at the time of purchase than the standard 20 percent down on a 30-year-fixed mortgage with a 4.21 percent. In that case, the annual required salary spikes to $215,598 to afford a home in the S.F. metro area.

To put those figures in perspective, the national median existing-home price is $255,600 — which requires an annual salary of only $56,160.

“Prices are rising quickly for two reasons: Plenty of demand and limited supply. During the quarter, the average number of months of available inventory of existing homes at the running sales rate was just 4.2; optimal levels are reckoned at around six months,” HSH says in its report. “Helping to drive demand are mortgage rates that have not only remained lower than expected this year, but actually declined measurably in the second quarter.”

The Robots are Coming
The concept of a virtual reality real estate broker has been around at least since the 1987 action picture “RoboCop,” when Peter Weller tours his old house ( and encounters an endless series of television screens where a cheerful broker makes his pitch.

And there have been a number of companies in recent years, like the recently merged Hightower and VTS, which have tried to use technology more in real estate brokering.

In November, Bryan Colin’s company, VirtualAPT, debuted a robot (nicknamed a very Star Wars-like VR2) that took his nine-person team nearly a full year and approximately $125,000 to build. It creates real, not rendered, virtual reality videos with voiceover tours of residential and commercial spaces. And the videos move through the spaces and can be streamed online. This is different from current virtual reality offerings for real estate, which are for the most part 3-D renderings of unbuilt properties, which jump from place to place within a space, rather than move fluidly.

While the idea of a robot might sound like a gimmick, Colin is adamant that this adds a new level of reality to the experience.

“We have so much access to open data that I can search property listings right now online in China and in any place that I can imagine,” said Mariel Ebrahimi, a co-founder of DistruptCRE, which hosts various technology-focused conferences for the real estate community, including one coming up in San Francisco on Sept.14th. “So why do we need the real estate broker? The owner has so many new opportunities for how to sell, buy and invest in real estate today that a broker needs to be an adviser. They need to know about all of these new opportunities for every type of tenant that could possibly be out there and be that open guide and trusted adviser.”

So far the real estate industry has been historically reluctant to embrace technology. One reason is the additional costs. Another is fear of change. And a third is fear of becoming extinct.

About Voice Of Housing

The Voice of Housing is a mortgage industry portal published by the Collingwood Group.
Contributors include former Ginnie Mae CEO Joe Murin, former FHA Commissioner Brian Montgomery,
Collingwood Group Managing Director Tim Rood and other housing professionals.

About The Collingwood Group

The Collingwood Group is a top mortgage industry advisory group based in Washingtion, DC. Collingwood's
expertise spans all aspects of Agency, non-Agency and FHA/VA housing financing programs and Ginnie Mae
securitization activities, among others.